Business, as I learned when I was in it, is about forming partnerships to get the end consumers products that they need, want, or will enjoy, in a way which is cheaper, better, faster or easier than the way they would otherwise get them. In this way, the manufacturer grows rich, the supply chain grows rich, and the consumer has a richer life experience. And, of course, both the transactions and the profits also involve a contribution to taxation, which funds many of the things which are good, but which would not otherwise happen if left to market forces alone.
But not all businesses are like this. There is always an undercurrent — and sometimes it is powerful and drags in whole communities — of businesses which make their money by tricking the customer, by preying on fear, on misinformation, on unethical selling tactics, or simply on the poor life chances of their victims. The Office of Fair Trading regularly shuts businesses of this kind down, but they persist, and, in some cases, gain the protection of the law, even when what they are doing is blatantly unjust.
In a deprived community, all of the following are probably acting:
unsecured, high interest loan companies
companies processing money transactions for a high fee for those without a bank account
employers who repeatedly hire staff for six months and then fire them, in order never to have to make redundancy payments
quasi-legal firms urging people towards unnecessary litigation
‘bait and switch’ online traders
landlords offering below-basic accommodation for prices designed to gain the maximum housing allowance
companies providing cash machines where there are no bank-supported ATMs, with a transaction cost sometimes 20% of the money drawn
Over the twelve and a bit years I lived in Stechford, one of the UK’s most deprived communities, I saw all of these, some quite regularly. By contrast with dodgy second-hand car salesmen, unhygienic restaurants, people selling contraband cigarettes and garages offering MOT certificates for dangerous vehicles, all of the above trade within the law. And yet they suck the life out of the communities least able to afford them, and least able to resist them.
This is legally sanctioned injustice. It engenders anger, and despair. I saw the anger boil over into rioting in the 1980s. In the 2000s, I more frequently saw a cold resignation. “They’ll always rip you, but you can’t do much,” is a phrase I heard all too often.
Should a nanny-state prevent people from spending their money however they like, even if it means they get perhaps just 70p in the pound in terms of value received? Or should predatory traders be allowed to get away with anything they like, so long as they stay within the letter of the law?
In the seminal book The Spirit Level, public health doctors Richard Wilkinson and Kate Pickett examine the life expectancy, crime rates and other key metrics from the twenty most prosperous nations, and show, fairly convincingly, a strong correlation between larger gaps between rich and poor and poor overall life expectancy and societal good for the community as a whole. The UK, Portugal, and USA have the widest gaps in the Western World, and perform worst on almost all the metrics. Correlation, of course, does not demonstrate causation. However, it is fairly elementary to show that endemic injustice begets both violence and despair.
Government should be working on global warming, on the economy, and on rebuilding Britain’s damaged democracy, because these are big things which only governments are big enough to tackle. But government must also have a care for the little things. The answer is not additional legislation. Indeed, many of these companies prosper in the tangled world of badly drafted legislation which allow them to invoke clauses or style themselves as other kinds of businesses than they are. But we do need some of the collective intelligence of Whitehall and Westminster to be directed at these issues.
There is no armageddon waiting round the corner if we do not tackle these things. The British National Party may well elect its first MP at the General Election, as might UKIP, trading on false blame for the causes of deprivation. But it is almost inconceivable that they will ever have enough seats on anything, even the Parish Council, to actually set or influence policy. But we should tackle these issues because it is our duty to do so. Those who are elected are elected to serve the whole population, and to make decisions which benefit all.